The UK Government has referred two key pieces of Brexit legislation recently passed by the Scottish Parliament and Welsh Assembly to the Supreme Court. The devolved parliaments’ bills seek to ensure the continuity of EU law and in doing so confer enhanced powers on the Scottish and Welsh governments post-Brexit. Following the referral, the UK and Welsh governments have reached a political compromise involving significant amendments to the European Union (Withdrawal) Bill (“EUWB“). Unless a compromise can be reached with the Scottish Government, the Supreme Court will rule on whether its legislation is within the Scottish parliament’s legislative competence.

The referral underscores heightened tensions between the UK and devolved governments over the demarcation of returned powers post-Brexit and the likelihood of future legal challenges and regulatory uncertainty in key devolved policy areas.

Background

The UK Withdrawal from the European Union (Legal Continuity) (Scotland) Bill (“the Scottish Continuity Bill“) and the Law Derived from the European Union (Wales) Bill (“the Welsh Continuity Bill“) passed through the Scottish Parliament and Welsh Assembly on 21 March. On 17 April, the UK Government’s senior law officers, the Attorney General and the Advocate General for Scotland, referred the bills to the Supreme Court, asking for a ruling on whether the legislation is constitutional and properly within devolved legislative powers.

The Continuity Bills were introduced by the Scottish and Welsh governments following their failure to reach agreement with the UK Government over the terms of the EUWB. The EUWB provides for a general transposition into, and the preservation of EU law in, UK domestic law, which it describes as “retained EU law’”. The effect of clause 11 of the EUWB as originally drafted was that the power to amend retained EU law in devolved policy areas would rest with Westminster, rather than the devolved governments. The Scottish and Welsh governments considered this incompatible with the devolution settlement.

Differences between the EUWB and the Continuity Bills

The Continuity Bills, like the EUWB, seek to ensure that Scots law and Welsh law continue to function without interruptions or gaps following Brexit. In contrast to the EUWB, the Scottish and Welsh bills seek to enhance the powers of the devolved governments over the returned powers.

giving powers to Scottish Ministers to make regulations to ensure that, where appropriate, Scots law in devolved areas can continue to keep pace with EU law after Brexit (there is no equivalent clause in the EUWB);

incorporating the Charter of Fundamental Rights into Scots law as it applies to devolved matters (the Charter is excepted from incorporation into domestic law by the EUWB);

providing for the continued availability of the general principles of EU law arising from the EU Treaties for a wider range of purposes than under the EUWB;

proposing that Francovich damages will continue to be available for failures arising before the UK’s withdrawal from the EU, irrespective of whether the claim for damages began before exit day (the proposals in the EUWB allow claims for Francovich damages only to continue if initiated before Brexit date); and

imposing a default procedural requirement under which UK Ministers must obtain the consent of the Scottish Ministers before they make, confirm or approve secondary legislation relating to devolved matters which modifies, or would modify, any retained (devolved) EU law.

The Welsh Continuity Bill is intended to operate alongside the EUWB. It does not provide for general transposition of EU law but, rather, gives regulation-making powers to the Welsh Ministers to ensure that EU law covering subjects within the Assembly’s legislative competence is preserved as part of the law in Wales after Brexit. The bill also empowers Welsh Ministers to modify EU law within devolved competence. The new body of EU law transposed by the Welsh Continuity Bill will fall outside the definition of “retained EU law” in the EUWB. As a result, the EUWB’s restrictions on the Assembly and Welsh Ministers in relation to modifying retained EU law, including clause 11, would not apply to such laws.

This issue does not currently arise vis-à-vis Northern Ireland as the suspension of the Power-Sharing agreement and the Stormont Parliament means no similar legislation can be brought forward.

The Legal Challenge

The Supreme Court is asked to rule on whether this legislation is constitutional and within the scope of the devolved legislative powers. At the time of passing the Scottish Continuity Bill, the Scottish Parliament’s Presiding Officer opined that the bill was incompatible as the Scottish Parliament could not make legislation about prospective powers it might have post-Brexit. The Scottish Government’s Lord Advocate responded that any powers incompatible with EU law are expressly enlivened only once the UK’s membership of the EU is terminated. The Welsh Presiding Officer, the Llywydd, declared that the Welsh continuity bill was within the competence of the Welsh Assembly.

This is the fourth time the Supreme Court will judge the legality of devolved legislation. There have been three previous Supreme Court cases regarding legislation passed by the Welsh Assembly while the reference involving the Scottish Parliament is unprecedented.

Compromise with the Welsh Government and amended EUWB

Following the UK Government’s referral of the UK Continuity Bills, the UK and Welsh governments reached a political compromise and agreed to amend clause 11 of the EUWB.

Under the compromise, which is given effect through the amendments to the EUWB tabled on 25 April and a supporting intergovernmental agreement, decision-making powers returning from Brussels transfer to the devolved legislatures. The intergovernmental agreement identifies 24 policy areas for which “common legislative frameworks” will be needed in whole or in part after Brexit. Whilst these are being designed and implemented, the UK will maintain the existing common arrangements through the exercise of regulations in specific areas. The UK Government will be under a legal duty to share draft regulations for the common legislative frameworks, so that the approval of the devolved legislatures can be sought before proceeding to the UK Parliament. The intergovernmental agreement provides for a presumption of regulating with consent, with the UK Parliament able to legislate where agreement is not possible, including to protect the UK internal market, ensure international obligations are met or manage our common resources.

The maintenance of existing frameworks is strictly time limited. The amendments now ensure that the regulations maintaining specific frameworks will expire five years after they come into force, if not revoked earlier, and the power to create those regulations will expire two years after exit day at the latest.

Following agreement on changes to the EUWB, Welsh ministers have indicated they will withdraw their Continuity Bill as long as the UK government withdraws its Supreme Court action against the law.

Comment

The reference of the Continuity Bills and ongoing negotiations underscore tensions between the UK government and devolved governments over Brexit.

On the one hand, it highlights the prospect of greater policy and legislative autonomy for devolved governments once powers are returned from the EU, consistent with the promise of Brexit proponents.

On the other hand, the UK Government has emphasised its desire to ensure that legislative and policy divergence across the UK does not compromise stability and certainty and the operation of the UK’s internal market following Brexit. The divergence between Westminster and the devolved governments has potentially wide-ranging effect. The UK Government’s provisional analysis of EU powers returning through Brexit, published in March, identified 153 policy areas where EU laws intersect with devolved competence. There is considerable risk of regulatory uncertainty in the 24 policy areas which will be subject to clause 11 common legislative framework arrangements. These are in areas of fundamental importance to the UK economy, including agriculture (including agricultural support, fertiliser regulations, GMO marketing and cultivation, organic farming and zootech), animal health and traceability, animal welfare, chemicals regulation, elements of reciprocal healthcare, environmental policy, fisheries management and support, food and feed safety and hygiene law, food compositional standards and food labelling, hazardous substances planning, and public procurement. Under the Continuity Bills and the recently-amended EUWB, the inability of Westminster to provide a broad framework similar to that currently provided by Brussels means uncertainty in affected policy areas, with business and individuals potentially being affected by excessive divergence and associated expense.

This could also impact on the UK’s trade relations, not only with the EU but with other countries. The UK could find itself in the same position as Belgium in relation to trade and some other international treaties, namely that it would need the consent of the devolved administrations to enter into treaties involving environmental measures (including climate change) or trade treaties (including those dealing with agricultural products), notwithstanding that foreign policy is reserved to Westminster. This could undermine the UK’s efforts to enter as quickly as possible into a large number of trade agreements, by causing delay and opening up division through the consent process.

On a more fundamental level, the reference demonstrates the impact Brexit is having on the UK’s constitutional framework. In Miller, the Supreme Court held unanimously that the UK Government was not required to consult the devolved governments before giving notice under Article 50, effectively rejecting any notion that the devolved governments might possess a de facto power to veto Brexit. The Supreme Court’s decision on the reference is likely to further elucidate the constitutional relationship between the UK parliament and the devolved parliaments.

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